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tv   The Pulse  Bloomberg  March 5, 2014 4:00am-6:01am EST

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>> the diplomatic reach. andu.s. secretary of state russia's foreign minister hold emergency talks. same target. china retains its goal for growth. >> and currency crunch. exchange-rate swings. we are live with the currency giant ceo. good morning, everybody. you are watching "the pulse." we are live from bloomberg's
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european headquarters in london. ballmer's big up, regret. what he wished he had done differently at the company. >> i do not know whether we were too busy or we only know the tools of the first two tricks. >> you will be hearing more from mr. ballmer later this hour. >> now, let's get to our top story. we begin with the continuing standoff in the ukraine. a war of words from the international community as president putin maintains the legitimacy of his actions in crimea. >> top diplomats from russia and the u.s. are set to meet. ryan chilcote is following the story from kiev. bring us up to speed. we are dealing with diplomacy rather than boots on the ground. >> a tense standoff here in ukraine. while diplomacy kicks off, the russian foreign minister is
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going to meet with the u.s. secretary of state on neutral ground in paris. president obama did speak a few days ago to president couldn't for 90 minutes. clearly, not much came of that conversation. we separately heard from both presidents talking to the media yesterday. president obama saying president putin was not fooling anyone. westdent putin blaming the for the crisis in the ukraine. these two foreign ministers are going to try to move things forward. meanwhile, military observers on the ground in crimea. is stilltion there quite clearly very tense. the united states, a lot at stake here, threatening sanctions against russia. russia indicated he had no intentions of escalating the conflict. in other words, it would not appear that he will send troops into the east of ukraine. at the same time, he will clearly hold his round in the
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crimea peninsula. >> you also have a big interview coming up later this hour. we are going to be talking to the former president of the republic of georgia. ago, his country fought a war against russia. they were in a very simple -- similar situation to what ukraine is now. he is coming up later in the hour and we will take a look at the issue of the so-called gas wars, the relationship between the worlds's largest natural gas producer and ukraine. the relations right now are strained. like we be in a situation we were in 2006? disruptions in western europe. we will be looking at that later in the hour as well. lots to talk about today.
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>> and then we have the prime minister of ukraine for the eu leaders summit. well one focusing as what is happening in china. the same growth target for this year as it did in 2013. the country's premier making the announcement at the annual meeting in beijing. stephen engle reports. >> the party has officially kicked off. the national people's congress, the annual session of parliament being held here in the great hall of the people. this is tiananmen square over here. the delegates are being hauled off to lunch. by the way, there are new frugality measures. 17 new measures to cut down on government wasteful spending and that includes buffet lunches and no liquor out lunch. also, there is forbidden city
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and mounted on. as lastet the same year. last year, they exceeded that with 7.7% gdp growth. some had hoped that it would lower gdp targets to around seven percent, a signal that they were steadfastly on the path towards reform. the premier in his annual work report this morning said we need stable growth to ensure jobs. this target is in keeping with our goal of finishing building a moderately ross burress society. this will boost market confidence and promote economic structural adjustment and more importantly, he said that stable growth will ensure employment. so many other numbers to run through quickly. year, 3.5%.as last defense struck -- defense
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spending will increase 12.2%. investment on the physical front will increase 17.7%. late last year, the communist party said they will continue the sixth consecutive year having a proactive fiscal policy. finally, this is a blue sky day in beijing. check it out. take a look. not a single small cloud in the sky. the premier said this morning that the country is going to wage a decisive war against pollution. as someone who lives here, i welcome that war. >> let's continue the conversation about what is happening in china, the targets that he was just talking about. jonathan ferro joins us for more on this story. the headwinds to maintaining these kind of growth rates are becoming bigger and bigger. >> they are. yes, it is the same growth target, but you were coming off an increasingly eger based and
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it becomes difficult to hit this target. over the last year or so, officials deemphasized the headline number. a lot of were asking the question this morning. how do you hit that target continually and restructure the things like credit and the property market that have contributed to the levels of growth they have seen over the last couple of years? it is a very difficult thing to do. credit is the thing that people are concerned about. we are thinking the first default may be looming. >> it is a $14.6 million interest payment, not that big. it is still a big deal. year, you get a record $7.7 billion in bonds for the sector maturing this year. can they meet those payments? it is a big concern not just for china, but for europe as well.
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people talk about the significance of chairman mao's red flag limousine going to this meeting today. the significance for europeans is that it was surrounded by vw-audis. that is a big deal because it is a huge market. it is not just about the chinese. it is about here in europe as well. >> jonathan ferro with the latest on china. >> the bank is grappling with write-downs and lower revenue, particularly in south korea. let's get the details. manus cranny joins us to break down the figures. >> with south korea, 10% of their net revenue. they are saying the consumer business, we are going to let people go. there is no central bullet for them in south korea. from an institutional investment
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point of view, the market is looking at the korea side of the business. they are also looking at some of the metrics that we use. yes, you have a headline miss. what you are seeing is a reduction in risk-weighted assets. your ability to withstand a shock, not too bad at all. in that respect, given the ,ommittee that looks after risk when you look at the geographies about where and how well standard chartered is doing, and china, property rise by eight percent. hong kong doing nicely. it is what you're are doing in china and the message is very clear. commercial real estate lending is selective. we have no exposure to the trust sector. this is part of the shadow banking sector. that is very much good news and being taken quite well by the markets. >> bonus payments have been a
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contentious issue for the banks. that is probably the understatement of the year. >> the us about that. that overall,is it will go down by 15%. they will take a knock of around 21%. 2012, $5.6 back at billion. that was 2.7 times his base salary. breaking that two times rule in europe. the market is going to look at this in perspective. we were just having a chat about this. when you look at what barclays they raised their bonus pool. i am looking at the arsenal in the telegram. anthony jenkins said he had to raise the bonus pool because of the attrition rate, people leaving his bank in north america. he was seeing a turnover of staff. politically, it is unpalatable
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to raise bonuses, but within the dynamic of banking and investment banking, it is traditional banking. human capital have contacts, acumen, and the ability to deliver revenue. they will not get paid by you. they will walk across the street or get on a plane to the man or woman who will pay them a substantial premium for the talent. >> that is certainly the argument that ceos are putting across. thank you so much. manus cranny with the latest from standard chartered. >> let's talk about what is happening with adidas this morning. willsay currency movements impact full year earnings. we had a profit warning late last year. earlier, the stock was down. it is beginning to recover now. let's get the latest. david tweed joins us from berlin. this is not a particularly new story that they are facing this issue. >> it looks as if they are looking through it. we saw the share price dropped
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by about 3.5% on the open. now it has even been a bit positive read it is virtually unchanged at the moment. let's have a look at where adidas makes its money and which markets are going to be affected by the currency. inope gets most of its cash europe, 40%. one of the fastest-growing markets is latin america. they reported 19% sales growth in latin america. when you translate that sales growth back into euros, it came to six percent. that is what the market was initially concerned about. now we are looking at what adidas is saying. fun a mentally, it is managing to increase sales and it is 2015 targetts route to have sales of 17 billion euros in 2015. >> the ceos contract has been extended two years. >> that is right.
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his contract is going to last until 2017. interesting to see that because he has been there since 2001. he is 59 years old. adidas is talking about a generational change. i also want to give enough time to find the right ceo. they are going through a critical period. have a look at the market share. adidas is number two, trailing just behind nike. his job is to try to close that gap and he is really hoping that they can do that with the world cup. they are still aiming for 2 billion euros worth of sales associated with the world cup. they like to see mr. hanner hanging around to make sure they follow through. it up there.ap we will be talking to him a little bit later. we are going to have a conversation with the adidas ceo and that will be in the next hour of "the pulse." so many questions to ask him. it will be fascinating to say
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the least. beatty exposure to russia as well. >> up next, we speak to an expert about the standoff between russia and the ukraine. we will dig deeper into the world words between president and world leaders next.
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>> let's go back now to our big focus, ukraine. the u.s. accuses russia of an act of aggression in ukraine and president putin denies it.
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as the top diplomats from the two nations meet today, we are discussing what happens next. joining us is a professor at the american university in paris and specializes in the diplomatic origins of war. great to have you on the program. thanks for coming in. the problem with the crimea crisis is that it is haunted by these previous stories of bungled diplomacy leading to world war i. try and run us through exactly how you are setting the situation that we are seeing today with crimea. >> well, the situation since the soviet collapse, ukraine and russia begin to threaten each other at the very beginning of the end of the cold war. incrediblee had an accumulated atomic weaponry left over from the soviet era. russia was threatening ukraine
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with preemptive strikes if they did not give up those nuclear weapons. the united states also was going to place sanctions on ukraine if it did not give up its nuclear weapons. on the very beginning, there were tensions between russia and ukraine at the end of the cold war. those tensions go back even earlier, when khrushchev gave the crimea over to the ukraine and russian nationalists opposed that. back to that in a minute. the main point here is that tensions from the end of the cold war started. 994, there was an agreement that ukraine would give up its nuclear weapons in exchange for russia, u.s., and european security assurances that all of the states would guarantee ukrainian territory. that is what has been questioned. that agreement in 1994, the budapest agreement, was a neutralized ukraine and all the states guaranteed its
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territorial integrity. that is basically what has fallen apart with putin going into the crimea. marketas often seen as a tactician. how on earth did he not see this one coming? there was already a threat to the black sea fleet at its main base. we have had a country which has , some would say, by a kleptocratic government for some time. how did he take his eye off the ball? >> from his perspective, he was worried that he made movement would renounce ukrainian neutrality. it would join nato, join the move towardsn, or the european union, and therefore undermined the eurasian customs union that trying -- that putin is to rebuild. he is trying to rebuild a mini .oviet empire
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he was hoping to draw ukraine into that. in fact, i think they made movement grew even more intense when it was rumored that yana yanukovych was going to make, says to putin did you -- would make promises to putin to join that. putin wanted to preempt three factors, that he would join nato, be closer to the eu, and that the blacks he would be a victim. youwo years before this, talk to anyone trying to do business in ukraine and they knew there were problems coming because of the nature of the way the contracts were being handed out. there was a small cadre of people taking all the benefits. the money was being vacant offshore. thered putin not see that was this possibility? how did he not figure out, in
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terms of the history of political miscalculation, how does this one fit? >> russia will definitely be isolated after this event. we are already seeing that as the russian stock market got a $60 billion or so. that is already a wake-up call for putin that this is a bigger disaster. plus the threats just to eliminate visas for russians and make it more difficult for them to go abroad is a major threat that will put incredible domestic pressure on putin. we do not have to go to much farther than the economic and minor political pressures like that. this point, the miscalculation would be on our part if we begin to threaten military action of some sort. there has been talk of deploying force and also bringing the ukraine into nato.
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i think this is the wrong way to respond. then has got to make mistake on his own. having said that, there is also thought am that putin compromise was possible at the last minute. that is to say that linking the eu and the russian customs union , the possibility that was being worked out in the background, but never came to fruition. particularly once the rumors came that putin was going to haul ukraine into the customs union. >> very nice to speak to you indeed. coming up, we will continue the conversation on ukraine. we will go to kiev and speak with the former president of georgia. -- whyt what he thinks he thinks the russian president cannot be trusted. ♪
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>> welcome back to "the pulse," live on bloomberg television, radio, and streaming on your tablet, your phone, and bloomberg.com. >> let's go to manus cranny. ofwe are waiting for some
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the final emergency managers readings to come through in europe. the best thing that i read this morning was from the chief economist at morgan stanley, the risk of japification on this map. it is high and rising. there is a 35% risk of what happened in japan, putting off purchases. to thegest threat central bank, they have got to deal with that tomorrow. what will they do? do jews in the u.s., we are watching. u.s., we are the watching. s&p 500, we are waiting for the private payrolls add. -- adp. and the nonmanufacturing. back to you. >> thank you very much indeed. still to come, the best in luxury and technology join forces. ari and applerr
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collaborate. >> and you can follow both of us on twitter. we will see you in a couple of minutes. ♪ . . .
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>> welcome back. i am francine. >> these are the bloomberg top headlines. >> china has a 7.5 growth target. the annual meeting of the national people's congress. chinese stocks fell today. they say is the first ever. we see a risk of deflation in the euro zone.
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barclays say that mario draghi risks making the same mistake the bank of japan made today. top u.s. and russian diplomats will meet today discussed tensions one day after vladimir putin said that he found no immediate need to invade the ukraine. john kerry will meet the russian minister in paris. we have pictures of him in madrid talking with his spanish counterpart. >> he said that they were encouraged from abroad. let's get the latest on the situation. let's go to ryan chilcote.
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>> we are joined by the president of georgia and the republic of georgia. he made a war of russian. what brings us to the ukraine? it has been many years and i was persona non grata. as soon as he was ousted, i was have two expect that we will help with advice because we have experienced. >> are you part of the anti-russian crowd. >> we all became friends.
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way, they did not really want to. >> what is the endgame? it is historical and sentimental. american companies are there. what has happened is that russia loves the biggest buyer of gas in europe and it has really shrunk. potentially, they have big energy plans for europe. >> it is not proven yet. >> if it turns out that american companies are there -- >> let me ask about the united states.
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>> yeah. crimea, the have gas and -- but let me ask you about the united states role. you had friendly relations with george bush and you had good relations with the obama administration. i expect that you feel that the administration was not as helpful to georgia as they could have been and will not be as helpful in the ukraine because the united states has bigger fish to fry with russia. i do not think anybody can afford to neglect this. if they do, it is a major disaster. this guy is dangerous. this is going to continue. it is not limited to crimea.
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it allows us to have another crisis moving somewhere and everybody forgets what happened in georgia apostates. it is getting shorter and -- ter and >> to be fair, he said that he did not feel any need to escalate. >> they are using the word of escalation stop there with the occupation and europeans might escalating.is he is escalating. let us do sanctions and go somewhere else. dreams was to big get into the european union. giveneople say that russia's strength today, it is unlikely to happen.
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does it need to meet -- does it need to be moved up? the agreement between georgia and the ukraine. to the need to do european perspective two countries and if he gets this way, it will transition to moldova. he goes to protect russian speakers somewhere and moldova theressian speakers and are more cap with russia. it is for sure. guarantees were with the ukraine.
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now, if the guarantees are not applied, ok. will they have article number five in the case of the baltics? i'm not so sure. he waits for them to return. and didarticle five baltics have the debates? he knows that he can get away. i am not speculating. websites that publish my thoughts with diplomats with the secretary of defense and american ambassadors. there are strategies in scenarios. i guess i was not the only one telling them that this might happen. >> we have 30 seconds. we have discussed this before.
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despite all the talk of economics, it is not the russia would beo years ago tough times of the 1990's. do you think it is fair to say the influence is in the soviet union and they will dictate the policy? nobody can do it and russia does not have it. they have internal thatrabilities and i think andight signify adventures it depends on how the west reacts now. some kind ofabout remote control process. >> thank you very much. betweenthe talks
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foreign ministers of russia and john kerry later today in paris. it is the first time the ministers have gotten together since the large conflict began in the ukraine. back to you. >> the very latest and the fascinating interview with the former president of georgia. we will have a few more. >> over the last few days, we have gotten the view of the situation in the ukraine. ceo of chrysler. >> if it deteriorates, that it will have ramifications with economic activity. i sincerely hope it gets resolved. >> jenna deliver in italy?
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>> he is the prime minister. >> we have a beautiful card on the other side. >> italy meets the united states. >> the united states will meet brazil. we're taking the brand international and we promise. >> ok. chrysleras the ceo of speaking to me yesterday at the geneva motor show. the italian ceo that i have heard of. >> yet interesting things to say about some of the biggest professional complements paid. >> it was part of our series with the oxford union debate. we met the retired microsoft
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executive. most famouse of the debating chambers in the world. he is amazing. >> he did not just stand at the front. >> he really did. >> the rally the troops and you talk about the biggest regrets and the fact that microsoft is two speeds and should have had a third leg. >> i'm very proud of what microsoft has achieved. microsoft had 30 people and a got to 100,000 in every iteration. he feels that he dropped the ball in the third trick with software. change. to have a man whoingly, this is a
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is still one of the biggest shareholders and it is necessary for microsoft to continue to grow. the biggest shareholder in microsoft today. --t is my greatest rish wish? that we continue in a way that is successful and it is hard for companies to the successful if they are not ambitious. i talked to everybody we consider to replace me and it was how ambitious they were for microsoft. >> he kept saying that they needed to be hard-core and focused no matter what. i have no other areas of hobbies. he is trying to work out what he does next. >> he does ok. absolutely fine. you talked about the nokia story.
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what did he have to say about that? >> he gave advice and he said that if you are just trying to acquire consumers and what is up, it will be on the phone. bring it in and harness it to own it and change the culture. facebook.e >> we had discussion with facebook and what he viewed as an outcome. he put in the blood sweat and tears like we did. it is hugely important and you have people who let themselves off. huge5 billion and he had a goal and vision and it seems that he is trying to work out what is vision and goal will be going forward.
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>> a bit of advisory and you want to see technology and he wants to go there. he says that nobody is knocking down his door just yet. >> the golf course. yes. plenty of time. steve ballmer and the full speech will be on bloomberg presents and that is coming up on the weekend television. come, we are joined after the company warns that 2014 will be significantly impacted by currency effects.
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>> good morning and welcome back. you are watching the pulse. we have the stock exchanges under pressure as we speak. alwaysted arab emirates draw their ambassadors and this is as a result of what is being reported and failing to meet obligations that relate to the security. we goe more details as through the morning. we have pressure on the markets right now. has a 7.5% growth target and there is concern that the country faces unsure
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corporate bond defaults this way. we talked to the head of emerging market research and it is great to have you on the program. we know what is coming and we should not be surprised by it. you are exactly right and we should not be surprised because it is something that the weernment wants to have and had in the past a state or local governments or a public asset manager. we had the default situation we calibrated the default and it allowed it to become systemic. we are going to see an attempt. ,> if that attempt fails
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there's a lot of repayments due shortly and you are talking about a fine calibration. there is a chance of not getting it right and the implications of that are what? >> i would say the following. the chinese have surprised in the way that they have had the system under control and it is difficult to gauge sentiment and what we have seen is that since january, it has been insignificant. and have loosened it created a two way that. we have more liquid environments prevent the situation where markets react in a negative way. muchve us a sense of how
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you see this going forward and is now the right time for investors to come out of china? >> i think a lot of investors have been coming out and if you look at the chinese financials, lows for at all-time very long time to compel them in developing markets and you could make the argument that the market is pricing a lot of ourtive news in already and colleagues on the equity strategy side are negative because situations have adjusted so much already. >> i have a question about russia. the market is looking for a defed ration and growth -- deration ingrowth. >> russian was looking to slow
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before the ukraine and the numbers were weak investment and investment is a poor story. sure. they are coming back and it is negative for quite some time. newsything, the recent affects sentiment and foreign investor sentiment. and the central bank believes that we are below that. reach thought we could 2.5%. where russia and the economic front is shooting themselves in the foot. >> thank you for joining us. we will take a break and be back in a couple of minutes.
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>> welcome back. you are watching the polls. when you resort panel, you have a big inverter and we will talk to a guy who in -- who invented a micro inverter. the sauces ceo. it is nice to see you.
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you invented the technology in 2000 ex. give me a sense of the journey and what the opportunity is. but it is fascinating and exciting. we are seeing a transition away from the older strain and the reason is obvious. we provide a better return on investment and a better business. we have a growing share all over europe. >> this converts the d.c. signal signalgoes into an ac that can be used for whatever you want to plug in. >> exactly right. exactly right. >> you're talking about strength in the u.s.. there are individual panels that act individually. >> they work more efficiently. what exactly right. with the inverter, if you affected, it brings down the
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entire system with the micro inverter system, we extract the maximum energy from the modules and you get a better return on investment for the owner. >> is a retrofit of the panels? >> it is. the rooftop market is the residential and commercial market. cost there a higher entry initially or is it similar to the other. >> it is similar but there is a premium. in the u.s. and in other countries, the return is better and the business that the solar installer has is more efficient and they are getting a better return. >> we have to wrap it up there. now, the first word is up next on the radio and for our viewers, the second hour of the pulse.
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and even bleaker outlook. we are going to take a break and see you in a few minutes.
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>> the diplomatic route. .he secretary of state >> china retains growth and threats of merge as the default looms. and assess her with exchange-rate swings. the ceo this hour. >> good morning to our viewers in europe and asia.
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i am guy johnson. >> this is the pulse. >> coming up, steve ballmer's what he really wishes he had done in steering the company. we only knew the tools of the first two tricks. it is a great video. we begin with the continuing standoff in the ukraine. the legitimate president was ousted. cap his -- dollar loan guarantee. let's go to ryan chilcote. so, a tense standoff in the
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ukraine and crimea. diplomacy begins and we have the russian foreign minister who is meeting with john kerry in the neutral city of paris. that the president of the united states and russia spoke on the phone and not very much was accomplished at all. yesterday, they both addressed reporters from the capitals and the russian president said he had no intention to escalate matters. held the ground and you have president obama who is talking about how vladimir putin wasn't fooling anyone with his military invention -- intervention in ukraine. there are sanctions threatened
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against russia and secretary kerry has said that maybe business should pull back. this is the first face-to-face talks and there have been lots of other talks. this could lead to a breakthrough on a technical level. sense of diplomacy and the ministers arriving and the russian ministers. you have the ukraine prime minister arriving in brussels. what will this lead to? things seem to of white it down. what is the russian rhetoric on this? well, i think the question is if russia will be punished by the west or if the west will try to punish russia for what they
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have done or if vladimir putin believes that what he has done is an intervention. will the west step back? if you listen to the rhetoric of the united states and the west, there have been threats and not going to the g-8 summit that takes place in june and threats to kick out russia from the g-8 and threats of sanctions against russian officials. they are saying nothing specific. there are a lot of countries that will quietly discuss distancing themselves from russia and a whole laundry list that theys -- issues need to work with russia and the ukraine is one of them. has to decide if
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this will escalate or if they pull back a little bit to keep things where they are right now. not escalate things, in terms of trying to isolate russia. what is happening as we speak in crimea? takend that russia has missile batteries. in thesituation spastic region? what is the story that is emanating from the capital. -- the capital? >> we lost ryan. let us continue the conversation. >> for more perspective, let's
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bring in a visiting fellow with the european council on foreign relations. i have a visiting fellow of the european stability initiative. >> you have a book out. fragile empire. -- in andin and love out of love with vladimir putin. this is a man and what is he trying to do. is he trying to annex crimea? is he showing the supercar that he wants russia to be? -- vladimir putin rules russia with a managed democracy. the ball bounced a confuses them. russian politics works in this manner. you have crackdowns and
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opponents are disoriented. all of this is done to legitimize the regime and what vladimir putin has done in the ukraine and the united states and the rest of the west is theater. >> he feels that he connects with a degree of impunity and what you think is the tactical outlook. >> levy me explain to you how russian corruption works. is stolen from russia and the money does not go to china. it goes to britain and comes to france and the european union. who brings the money and? it is not the sort of british bankers and german intelligence. it goes into british tax havens and prophecies. >> it is hard to true all of
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that. >> is easy to prove. russian officials have income declarations -- declarations. is clear, looking from russia. >> that is ok. this is illegal. >> according to the russian is for illegal0% activity. on.et's move >> let's have a look at the trading partner. the largest foreign investors are the british virgin islands. >> this is what we want to get the bottom of. let's try to figure out what and view is on the ukraine how this crisis will pan out. >> vladimir putin feels that he
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was pushed out of deciding the ukraine's fate. what happened was not a blitzkrieg. rents -- thehe west was thrown off balance. imposed,see sanctions we will see rapidly deteriorating rates. happens, if they decide that they do not want to carry on with this, how influential committee on vladimir putin westmark >> his billion-dollar bets with his regime is that there is too much money involved to impose meaningful sanctions. imposednited states has visa restrictions in the past. -- >> russianna
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money is not in the united states. are interested in making money than standing up. >> you are certain that he is not miscalculating this. >> i hope he is. going to 10 downing street two days ago. the first thing laid out was protecting london from sanctions and making sure that russia is open for investment. only banking sanctions can harm vladimir putin. theou think they will get sanctions? decide that they will impose sanctions, it will exclude global banks from doing business with russia. various other institutions have
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learned the lesson carefully. whenever that london says is irrelevant. said isvladimir putin is not unity in the west. >> if the u.s. decided that that is what they're going to do, the banking story changes. >> the statements that john they ared is that declaring war on syria and then nothing happened. john kerry does not carry the ame weight in russia that u.s. secretary of state would have many years ago. the question of the red line has been called into question. >> you say they are too scared to do anything and the only way to hurt vladimir putin or keep him in check would be the markets and the 50% selloff that we saw on monday.
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>> the markets bounced back and what happened was people selling quickly and calculating a full war. the bounced that happened the next day means that we should do bet that the market will work.litician's >> this is a temporary reprieve and many people have come on and said that the markets are staying calm because the same situation will resolve. >> what i've seen in the advisory is the markets being sufficiently calm by a press a plungee and taking if serious fighting breaks out. >> thank you for joining us with
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the ongoing situation on that. about talk a little bit microsoft over the last few months. the cbo was at oxford university the trickse about that his company pulled off. in data centers. >> he says that microsoft missed out on the smartphone success and we know that and he knows that. he says that he regrets not combining the development sooner. >> people ask me why i did not do the trick right. that i was too busy and only knew the show of the first to tricks. a lottricks will go for
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of years. in our industry, you have to do a third trick. >> the european business correspondent was there and she joins us now with more. very charismatic and engaging. flamboyant as ever. still very much of the view that the acquisition may have the third brought together. something that he felt that he had dropped the ball on. he continues to excel and he is one of the biggest shareholders with skin in the game. give tooot want to much. to remainy wants intact and he says that many in the market unwind and selloff elements. , no, remain optimistic
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and that is when you can invest. term, it does not work against google and it will work from machine to machine technology. he was really interested in bringing technology to education and health care. oxford union in just a moment. >> you can see the speech in the weekly television. about theoing to ask currency warnings. that is after the break.
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>> good morning. you are watching the pulse. we are live in london and let me talk to you about what is happening. data relates to february and what we have seen is the service sector that has weathered that reasonably well. that theyinteresting are focused on the cap and we can debate.
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there talking about it being censored in the labor markets and that goes back to what the guidance was in england and talking about the unemployment story. we see this in the labor market. has moreof england room to maneuver? i don't know. >> china has a target for economic growth and this may make it hard for the leaders to achieve the goal of credit risks. here is jonathan ferro. week,get a default this it will not be a big surprise. >> is the tip of the iceberg. if you look at the energy, this is what people are talking about of it is an interest payment
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$14.6 million. it may not be a big deal. in the grand scheme of things, when you have a record in that it will be interesting to see how far it spreads. >> we were talking about finessing this and he wants to finesse it. he has been good at managing these situations. is dabbling with capitalism not an easy thing. they tried it and it was a bigger deal. you cannot experiment when it is such big numbers. .> the market cannot get away you can see significant capital and if you want to talk about china, we need to give them the benefit of the doubt over control. it is a big step.
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>> it is almost like a warning signal. have as will stop >> you lot of pressure out of the system and we will manage them and show you that we are in control of the situation. >> you try to bring discipline to the market. you the growth figure this morning and everybody is almost talking about the same thing. in that compatible with 7.5%? every time we had a 7.5 growth target, the basis gets bigger and the challenge is more difficult. target and can you credit one of the big things was getting rid of pollution and how do you address it? are these compatible? these are tough things to do. that westerngs
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nations had to face. >> yes. >> thank you so much. still to come, the currency crush and we will speak to the ceo.
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>> welcome back.
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>> we see that shares our tumbling a little bit at the open in the last few days. there may be a slightly different picture. let's get the latest from david tweed. prices,ng at the share it is interesting to see the replacement there. is coming into the studio and i think that some people are looking through the warning on the impact of currencies on earnings and some have done well. let's have a look at a pie chart. dominating and the rest of that is outside of europe. it makes them vulnerable to movement of currency and what i want to focus on is latin america and the latin american 32% and thatwas
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came from argentina, mexico, colombia. good numbers. america wasor latin it has you can see how an impact and the chief executive officer said that nine percentage points came off of the top line in the fourth quarter because of currency movements. that said, one of the questions is going to be the five-year program to increase profitability and will they be able to reach the targets for some of the profitability goals. >> thank you so much, david tweed. we hope to speak to the ceo very shortly and we will be talking about the currency swings and russia. >> we are having a problem tracking him down and we will succeed.
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we'll take a break and a reminder that you can follow us bewhat are and we will talking a little bit more about what happens when apple used the ferrari.
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>> welcome back to "the pulse." >> these are the bloomberg top headlines. >> china set a 7.5% growth target in 2014 in line with last year's. the premier told the annual meeting of the national people's congress the target will boost market confidence and protect jobs. chinese stocks fell today on concern the country faces its first-ever bond default this week. >> top u.s. and russian diplomats wade through tensions
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in ukraine after -- a day after the russian president vladimir putin said he saw no immediate need to invade the ukraine. john kerry will meet the russian foreign minister lavrov in paris later. president obama also spoke to angela merkel on the phone for about an hour yesterday. the conversation centering on what is happening in the ukraine , this according to u.s. officials. >> russian markets are slowly recovering from monday selloff. it was the biggest loss in five years. the ruble dropped to a record low. asked the ceo of fiat about the situation in ukraine. >> how much of this is a shadow? >> if it deteriorates, it will have ramifications a terms of economic activity, even psychologically. i sincerely hope it gets
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resolved peacefully. keenejust 20 minutes, tom on "surveillance." he joins us with a preview. a lot of folks in ukraine and look at the markets. >> you see the markets recovering, but not all that much. we knew look at currency, when you look at the bond markets, yes, it is better, but how much better? a lot of that will come off the paris meeting of the secretary of state and the foreign minister. we will be looking at that as you have. we will also look in the u.s. at the burgeoning m&a activity and private equity activity. leo hindery will join us with his astute analysis of private equity of politics and also in timothy bitz burger. it will be a spirited decision about a better market at a better wall street as well. >> thank you so much. let's talk a little bit about
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what tom was talking about, what we're been talking about all morning, diplomatic efforts to ease tensions in ukraine are underway. russia is considered a $3 billion loan to the ukraine that would pay its debts to the russian natural gas exporter zprom.s gas problem -- ga >> an independent square, the speaker calls on the men in the crowd to sign up for the ukrainian army to take on russian forces in crimea. but the expectation here is the next run by not involve troops at all. ukraine allies on russia for most of its energy. it uses that natural gas to fuel its industry and heat homes. the fear is that reliance will be russia's next weapon. russia could punish ukraine by cutting the gas off altogether. >> if russia turns off the gas, what would you do? pray deter the cap at
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another way. russia cannot refuse -- use gas as a weapon. >> on independent square, dealing with the cold was a concern. they have been out there for more than three months. they also know about gas shortages. russia has turned off russia's -- ukraine's gas more than once. the so-called gas wars. ukrainian production. but for how long russia will be able to be in the situation? [indiscernible] what will happen to the economy? >> nightfall and they're celebrating in kiev. back in their homes, gas is still flowing.
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the next front is still an invisible threat. the latest on the situation, the gas situation. we go to kiev for the latest. what more can you tell us? >> gasprom today said gas is flowing through ukraine. is flowing as usual. it doesn't look like there'll be a gas war anytime soon. what is happening, however, is gazprom has removed that discount their giving ukraine on the gas as part of its bailout for ukraine, that it is continued after president yanukovich was ousted. and that has provoked the ukrainians to start talking about maybe they can get gas from western europe. this has always been kind of a , butdream, excuse the pun it looks like because of the
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abundance this year of gas in other countries have said they may be able to pony up about 10 billion cubic come upnd another could with another 5 billion. the country needs 30 billion. it is a very different climate -- forn when we had of the first gas wars back in 2006. it may be the case now that gazprom as a little disincentive to turn off the gas because at the end of the day, obviously, it needs to guarantee its western customers that they're going to get it. and if ukraine can get it elsewhere, well, it is done a very good threat. andyan, talk about threats a guest you had the last hour, a man who knows something about russian threats and how they are delivered. with thespeaking former president of the republic of georgia.
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led, albeit a short war, against russian forces in georgia. what is interesting is georgia faces were faced a very similar situation to what ukraine may be looking at in the very near future innocence there's sort of a russian statehood if you will, a part of georgia that is under the russian forces. and that looks like that is what happened to crimea. we will leave it there. thank you very much. let's listen to the sound of ryan's conversation. dangerous. is the reality is, this is going to continue. this will not limit itself to crimea. this tactic is simple. grab part of the territory, lay , move another crisis and
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then everybody forgets it. like what happened in george's case. >> for more perspective, let's bring in chris joins us from moscow. great to have you on the program. what do you make of the latest developments? what is vladimir putin trying to achieve? wei think yesterday certainly saw the president looking to calm down the situation. i think the government was very surprised and very concerned about the market reaction, particularly in relation to the ruble on monday. i think that unsettled them. it led to this more consolatory comments from the president yesterday. now as we see talks are starting in europe. the hope is those talks will he do some sort of agreement or settlement. for sure, the market reaction on monday took the government by surprise, and i think that definitely has led to this kind of step back and calm her approach.
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calmer approach. >> a guest earlier said russia, putin, really doesn't believe there will be a significant reaction from the west, in particular, no reaction from europe and the market story is something that will blow over and blow over fairly quickly, and as a result of which, that is unlikely to have a significant impact on the tactical thinking of the kremlin. ok, there are two parts to that. yes, i generally believe people believe there will not be a major reaction from the west, particularly from europe. russia is one of europe's biggest trading partners. we know about the energy reliance, but also russia is the world's sixth biggest consumer market. much of that came from europe. in the sense we talked about the fail,and the too big to the energy position of energy
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market in russia makes it difficult to impose sanctions we saw in iran. but i do believe the kremlin is paying a lot more attention to the backdrop investment story in russia. we had a big slide in the economy last year. this year it started quite weak. there's a lot of nervousness and drop in confidence. russia needs to attract a great deal of foreign investment. it is not so much the threat of direct sanctions i think that as the government worried, but more the fact reputational damage or risk assessment might result in a big drop off in investment and that will keep the economy trucking along at a very low rate for a long time. i think there is a more serious aspect to it. >> chris, the same time, if the markets are recovering, vladimir putin has nothing to fear and at the same time, much has been made about the fact he doesn't actually fear any superpower in the west. he thinks he has china backing him and the rest are pretty insignificant.
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>> look, the markets are recovering. people are nervous and waiting to see what happens next. if there was to be the duration of news flow from crimea, we would see a reaction quickly. it is a never situation. russia's balance sheet is very strong. when the georgia war took place, level is abovee that. russia's not under financial strain. i would not underestimate the concern of the government over long-term growth rate. if the economy does not pick up, then we get to the next election cycle, just over 2.5 years, then i think there will be more of a public negative reaction to the government at that stage. as we talked about, they are well aware of it and the fear for the kremlin is not so much the external threat of sanctions , but the domestic threat to the economy and what that might
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differ public support to the government at the next election. chris, briefly, the banking sector. some are talking about you as may be doing what it did with iran in targeting the financial sector. if the u.s. says it will have an impact on the financial sector, that means the europeans will effectively get dragged into that. what impact would that have on the domestic economy in russia? >> if we were to see, particularly in europe, european reaction is much more important than is the case with the u.s. capitale talking about flow restrictions, that will affect trade. you have to take that into the whole package. the think if you're to see any of those series of restrictions put in place, you would surly have an impact on the banking sector, the ruble, and also remember, it would be a blowback in terms of impact on companies exporting to russia as well. it would be a very serious step rather than just the first political reaction. ofthank you so much for all
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that, chris, senior partner at macro advisory. the financialw markets are moving is wednesday morning. jonathan is that the touch screen with more. comes down to escalation risk, just as it did yesterday. the perception is some of that is diminished, be that right or wrong. a little softness across europe. these are not stupid clients. wednesday is really not monday. ftse off and dax down. dollar-yen moving higher. so the safety of the japanese yen on monday, reversing on tuesday. today you see the dollar up against the yen. for me the story will move on a little bit tomorrow. we will keep an eye on the ukraine and russia report. it is a big deal. the euro dollar very volatile this morning. tomorrow, the small matter of and ecb meeting. the consensus is they will not move.
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forecast for 20 16 inflation. they are critical. critical. if you have not read it, read simon kennedy's piece on the ecb .014 the similar there's will blow you away. -- the similarities will blow you away. that is crucial tomorrow. well, that would put pressure on the economy and the inflation story as well. >> coming up, titans combined at the geneva motor show. the snake because the new apple -- a sneak peek at the new apple ferrari. ♪
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>> welcome back to "the pulse." take a look at stocks. cadbury stocks down the most in three withdrewer their ambassadors. threatens to fray the of corporation counsel. elliott has more in the story. take as to what the story is about. >> on the surface, it seems it is just a minor spat, difference overinion in, if you like, the perceived support for muslim brotherhood. where normally the member of the gcc would do with things behind closed doors, this time things seem to have spiraled beyond
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that. we're the unprecedented situation where by three members of the gulf corporation counsel have removed or recall their ambassadors in protest. they say it is to protect security and stability. they are annoyed because after the foreign ministers meeting, they failed to persuade qatar to implement an accord that would support or stop support for anyone who threatens the security and stability of gcc countries. in other words, this is qatar's support for the muslim brotherhood, whose some of the members were based in qatar have been resizing the other kingdoms of the gulf and that is not something -- criticizing the other kingdoms of the gulf and the is not something the other members have like. the muslim brotherhood is banned
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in most cases. they don't like that any criticism of themselves, particularly from the brotherhood or from a member of the gcc. we have seen the impact on the stock markets. the last time i checked, qatar was down about two big percent, , andubai as well -- 2% dubai as well. >> where do we go from here? >> i don't think anyone is panicking just yet. this is a difference of opinion. no one would be hugely surprised to see things go back to the way they were unaware by they resolve their difference of opinion discreetly he had closed doors. theirreby they resolve differences of opinion discreetly and behind closed doors. you never know. in qatar, let's not forget, never relatively new leader who has been in power for less than a year. -- we have a relatively new leader who has been in power for
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less than a year. he is quite young. ultimately, we could see this being him if you like, a gust in a gas state. elliott, thank you for that, middle east editor with the latest on the gcc countries. >> what happens when two of the world strongest brands combined? apple met at the geneva motor show. tom gibson was there. next phones and the other makes luxury cars. two of the world's most sought after brands. now, they are working together. apples car plays the company's newest and available in the newest ferrari just launched at the geneva motor show. a -- in othert of
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words, to give to our clients when they drive, the possibility to be connected. >> it can be used to get directions, make calls, listen to music. whether it is controlled by voice with siri are using the steering wheel, it is up to the driver. at how was a move is partnering with ferrari, a brand was exquisite it is cutting the number of cars it makes, which means less ipods in your cars? it has also partnered with other teed other -- with two other highbrow brands. betting with the likes of ferrari and mercedes, apple looks like it is sending a message. in the mobile world, he wants to maintain its luxury status. >> talking about driving. i'm driving my android car today or my apple car today. >> i would be up for that.
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other company news. france's is retail reported a jump in annual earnings as investments help sales rebound. carrefour has been maintaining lower prices. >> air france, the largest airline in europe, getting a luxury makeover. the changes range from high-end seats to bigger entertainment screens as the company's ceo attends a turnaround. he will trim spending by cutting almost 10,000 jobs. >> another blow for bitcoin. flex corn was forced to shut down after hackers stole almost 900 units of the currency according to the guardian newspaper. the bitcoin bank says it still has some good coins in cold storage, but that means there were held in devices are not connected to the internet. kiev for the to latest.
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and lavrov meeting later today. ♪
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>> welcome back. let's talk about eurodollar. earlier on we saw better-than-expected data coming through. i'm going to move on from this. the bank of england is coming through with the flash say no evidence of any stock polluted
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and the manipulation. that was a story that ran a few weeks ago. they're now responding after an internal investigation. >> this is first reaction from the bank of england and we will stay on top of this. still very much topical. >> bloomberg leading the story. >> for look at what else are watching today, we go on the ground to kiev. ukraine is still front and center. onyes, i will have my eye crimea. you havegood idea when 16,000 troops on the ground. we will be looking at paris and brussels. paris is where the secretary of state john kerry is supposed to be with the russian foreign minister of rob later today -- ov today. and the new prime minister of the country as they try to find some way out of the impasse.
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back to you. >> thank you so much. ryan will be covering everything aom kiev and we will have europe editor from brussels to keep an eye on the ukraine talks. >> we will take a break. "surveillance" after that. ♪
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>> secretary john kerry will meet with the russian foreign minister in paris is markets surge. the animal spirits increase as wall street today consider
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ipoing themselves. e-cigarettes. i don't get it. tobacco goes in search of a savior. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. i am tom keene. scarlet fu with me. he does not smoke you cigarettes, cory johnson join us as well. the morning brief, u.k. services expand for the 14th month in february, increasing to the highest level since september 2009. u.k. manufacturing growth pmi roseed in february faster than initial estimates. the strongest enemas three years. euro recovery motoring. appomic news, nba, mortgage , employment changes at

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